LONDON Jan 22 (Reuters) - World stock market losses are
approaching $8 trillion so far this year and investors last week
poured the most money into government bond funds in a year,
suggesting they fear the global economy could tip into
recession, Bank of America Merrill Lynch said on Friday.

The bank's U.S. economists also said on Friday that the
likelihood of the world's largest economy entering a recession
in the coming year has risen to 20 percent from 15 percent.

While a repeat of the 2008-09 great recession "is a big
stretch" and even the one-in-five chance of a normal recession
remains low, they cut their 2016 growth forecast to 2.1 percent
from 2.5 percent.

Reflecting the increasingly bearish sentiment engulfing
world markets, some $7.8 trillion was wiped off the value of
global stocks in the three weeks to Jan. 21, BAML said.

"We cannot rule out a recession in the next year. Accidents
will happen, and we are concerned about the lack of policy
ammunition to deal with a major shock," economists Ethan Harris
and Emanuella Enenajor said in a note on Friday.

"However, when markets are in such a fragile state there is
a temptation to lose sight of the economic fundamentals. To us,
the economy is okay and recession risks are low," they said.

Stocks around the world have had one of their worst Januarys
on record, with slumping oil prices, deepening concern over
China, and the Federal Reserve's first interest rate hike in a
decade all spooking investors.
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